Venture Capital: New Unprecedented Catalytic Mechanism to Boost Funds Dedicated to Startups

Amal El Fallah Seghrouchni, the Minister Delegate for Digital Transition and Administrative Reform, emphasized that the establishment of this catalytic fund addresses a clearly identified need: a dynamic market that remains underfunded relative to its potential. She noted that the ministry is allocating 400 million dirhams to this mechanism, which is intended to cover initial losses or to invest directly in selected funds. “This tool offers a real reduction in risk and opens access to capital for a larger number of players. It allows investors to commit significant amounts from the early stages, enabling startups to reach critical milestones in their growth trajectories,” she explained. The minister added that this initiative aligns with the ambition to position Morocco as an African innovation hub, in synergy with structural initiatives such as the Arab-African hub D4SD and the Jazari institutes, and in coherence with the Morocco Digital 2030 strategy, which aims for the emergence of “ten gazelles and two Moroccan unicorns.” Nezha Hayat, General Director of FM6I, described this mechanism as more than just a temporary support. She referred to it as a “structuring act” that lays the groundwork for a more robust market capable of sustainably attracting national and foreign capital. She highlighted the importance of the initial loss coverage mechanism, designed to encourage investors to engage earlier in investment cycles and with greater conviction: “By creating a real buffer against risk, we encourage both Moroccan and international funds to support startups from the early stages and to follow them further in their development.” Khalid Safir, General Director of CDG, outlined his institution's commitment to a renewed strategy based on an “open architecture.” This approach aims to mobilize more capital through funds managed by private operators, both national and international, to broaden the economic impact of investments and strengthen a Moroccan private equity ecosystem that meets global standards. He praised the exemplary coordination among the public institutions involved, noting that the establishment of a catalytic tranche aligned with international best practices represents a significant advancement for attracting venture capital funds operating in the Moroccan market. Said Jabrani, General Director of Tamwilcom, expressed gratitude for the trust placed in his institution, which is responsible for operationalizing the catalytic mechanism on behalf of the ministry. He reiterated that Tamwilcom will leverage its expertise in innovation financing and risk management to support the scaling of this tool. Selected seed and venture capital funds will benefit from either coverage that allows investors to substantially reduce their exposure or direct investments that comply with international best practices in the sector. Following the call for expressions of interest launched by FM6I, nine management companies were pre-selected from 47 applications, demonstrating strong enthusiasm for this mechanism. These funds cover an investment continuum from Pre-Seed to Series A and beyond, ensuring comprehensive coverage of the various development phases of startups. The first pre-selected funds aim to invest nearly 2.5 billion dirhams in Moroccan startups, including cumulative contributions from the ministry, Tamwilcom, FM6I, CDG, and third-party investors mobilized by the managers. Their areas of intervention encompass strategic sectors such as fintech, agritech, healthtech, edtech, and climate tech, featuring a diverse range of profiles including national and international managers and mixed consortia.